W4 social enterprises and mutuals
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Transcript of W4 social enterprises and mutuals
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Local Partnerships
Our missionLocal Partnerships mission is to enhance the quality of people’s lives by giving trusted, professional support to local public bodies to improve their ability to source and deliver high quality, cost-effective public services and Infrastructure.
We are jointly owned by HM Treasury and the Local Government Association. We provide the public sector with commercial expertise and know-how.
Who do we work with?We work with all Councils, local authorities and public service providers.
Our work on the Mutuals agenda
New Models of service delivery – work with councils to explore the options for delivering services in a different wayMutuals and spin outs – Mutuals information service, available to all. Supporting those spin outs which are have different features to generate and share learning, developing assurance mechanismsSocial investment – Social Enterprise Investment Fund
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What will we cover in this session?
• A quick look at some models available under the ‘Mutuals’ banner• A quick look at the ‘right to bid/provide’• The ‘spin out’ journey and who says yes or no!• Some potential elephant traps and how to avoid them• How Local Partnerships and the wider LGG can help
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Being clear about the purpose of the change
The aim is to provide flexible and responsive services through securing staff and community ownership and influence over the way the service develops and is delivered
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National definition of a Mutual
• Employee Owned [to a greater or lesser extent]• Why?
• enhanced quality and better outcomes for the people who receive services
• increased productivity – lower sickness, better use of resources• more likely to ride the ups and downs that a business faces
• Public Service• deliver services to the public free at the point of delivery and paid for from
the public purse• Doesn’t preclude the enterprise from also delivering non-publicly funded
services – generate additional income to reinvest in public service delivery
• Could be a social enterprise, a joint venture with a public/SE/ private sector partner or a full employee owned private sector business• Defined by the way in which surplus is distributed• To be a Mutual it must have employee ‘ownership’ at it’s core
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Possible models
Social Enterprise
Surplus typically distributed for the benefits of the local population [surplus used to fund discretionary services/developa community fund/support the establishment of community groups etc]
Social Enterprise/Private Sector JV
Surplus split between private sector investorsand community benefit fund – typically seen whereSignificant investment is needed
Private Sector Surplus distributed to owners (Shareholders/employees) in the form of a dividends to shareholders and bonusto employees (John Lewis, Circle)
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The push or pull effect: does it make a difference?
New EntrantsSpin out
Existing Providers• What will I sell and who will I sell it
to?
• Is anyone else selling something similar?
• How much will I sell it for?
• What will be different to what I do now?
• How do I get support from the council/public body?
• How do I get the unions and staff on board?
• What services should be funded by the public purse?
• Are other sources of income available to help fund services that local people need and want?
• How do we get the best value from services commissioned? How do we balance risk and control and safeguard our reputation?
• How do we encourage communities to become less reliant on the public purse?
• How do we support staff to stay in employment at a time when the public sector needs to reduce staff numbers?
• How do we stimulate interest in Mutuals and support people on their journey of transition?
Top Down
Bottom upits not just employees who want to do something different
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Social Enterprise: some examples with different features
• Cleveland Fire Brigade• Early stages of development• Purpose: to continue to deliver discretionary services and keep people in jobs• Aim: raise additional income through trading with the commercial sector (selling services to
high risk industries), securing efficiencies through reducing bureaucracy and engendering staff ownership
• Two step process – trading then full SE• Learning disability services
• Nearing full business case• Opening a garden centre to supplement income and provide work for people who use their
services• Adult Social Care
• Need to present case for change to cabinet in September – lots of work undertaken but not sure if they have all the information needed to present a coherent case
• Not looking to trade at this moment • Wants to examine the impact of personal budgets on income streams
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Social Enterprise journey – realising aspiration
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4 Milestones and 3 stages of readiness
• There are four milestones in the right to provide process: • 1. Submission of the expression of interest • 2. Production of the draft integrated business plan • 3. Production of the final integrated business plan • 4. Go live
Success is NOT associated with the words of the page.. Its about being
• Business ready – a ‘commercial’ understanding of the business
• Market ready – ensuring the business can compete with others
• Investment ready – securing contracts, capital and revenue investment
Assurance
Due Diligence
Contract Management
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Some elephant traps
• Options have not been assessed – need to conduct an options appraisal• Not aligning vision to the strategic direction of the council [only 48% of councils have a
service strategy in place and many members have bad experiences of outsourcing efforts of the past] – consider degree of risk and control to be transferred. Engage members in the options appraisal process
• Many focus on form verses function and viability – focus on what the business is there to do and then look at which form facilitates success
• Not paying attention to the money: viability, costs, cash flow, liabilities, income – use the business planning process to develop commercial skills
• Procurement specialists are too risk averse – consider options for market testing – is there risk of challenge? Can you award a sole provider or dowry contract? Do you have a competition strategy?
• Staff and unions are not engaged – engagement all the way through the process• Not sure how to move to the new model – seek help and support, access learning from
others• Drag and drop existing behaviours into the new model – pay attention to defining and
developing the culture of the new business
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Local Partnerships and the wider LG Group
Local Partnerships• Mutuals information service – sign posting service• Tools and products available• New models programme – business infrastructure, prototype sites to
address new challenges• Link between local and central government• Contact [email protected] or the Mutuals information service
• Wider LGG• Communities of practice• Workforce matters
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Mutuals information service: signposting you to help and support
• Not sure where to begin – what do I need to do? Who do I talk to first? What should I include in my expression of interest? How do I do an options appraisal? What is a commercial grade business plan? How do I know my business is sustainable? Is there any development funding?
• My manager is blocking my ideas, our politicians don’t want to ‘outsource’ anything and don’t like ‘social enterprises’, I can’t get staff and the unions on board, how do I engage service users and the public?
Mutuals information service
Phone: 02071877377 (staffed Mon to Friday 9am – 5pm – Voice mail 24/7)
Email: [email protected]
www.local.gov.uk/mutualsFree and confidential
